The proponents of the bill generally held that it was required to prevent wealthy private parties from "buying elections" via advertising campaigns or other financially costly lobbying, while the opponents considered it a serious restriction of civil liberties, and further considered that spending private money on political campaigning was a democratic right.

Effect

The Act amended numerous areas of New Zealand electoral law. Principally, and most controversially, it proposes regulation of "third party" election campaigns

Third party campaigns

The Act makes it illegal for anyone to spend more than NZ$12,000 criticising or supporting a political party or taking a position on any political matter, or more than NZ$1,000 criticising or supporting an individual member of parliament, without first registering with a state agency, the Electoral Commission.

The Act as introduced required that unregistered third parties file statutory declarations before publishing election advertisements.

The Act originally limited the spending of registered third parties on political advertising to $60,000, but this was later increased to $120,000 by the Select Committee.

The regulation of third parties also extends to their finances. The Act requires that third parties disclose all donations they receive over $5000. Anonymous donations third parties receive over this level must be given to the State.

Regulated period

The Act extends the "regulated period" for election campaigning from the current 90-day period to begin on January 1 of election year - from three months to around ten, depending on the timing of the election. This is the period within which electoral advertising must follow election rules, and the period over which the spending limits apply. This regulated period applies to individual candidates, political parties and third parties.

Controversy

The Coalition for Open Government, a group that advocates the reform of election finance law in New Zealand, opposed parts of the Act, particularly the failure of the Act to ban secret donations to political parties, given the strong financial disclosure requirements the Act placed on third parties.

The broad definition "election advertisement" came in for particular criticism. Critics, including the New Zealand Law Society, Catholic charity Caritas, and the Royal New Zealand Forest and Bird Society argued the definition will catch not just electoral speech, but almost all political speech - including things like placards at protest marches.

Criticism has also been made over the process that led to the Act's introduction, which only involved discussions with the Labour Government's supporting parties, and not the Opposition.

However political commentator Chris Trotter had harsh criticism of the detractors of the Act in several opinion pieces in The Dominion Post. He wrote in the 17 August Dominion Post,

"let's just take a deep breath and examine the rules that govern election spending in Britain and Canada (countries which, the last time I looked, were still counted among the world's leading democracies). In Britain, "third party" expenditure is capped at 5 per cent of the expenditure authorised for political parties in the 12 months prior to polling day.

In Canada the figure is 1 per cent, but applies only to the period of official campaigning. (Mr Burton is proposing a cap of 2.5 per cent or $60,000 for 10 months.) In both Britain and Canada, third parties are required to register with the official electoral regulators; both countries also restrict the contributions of foreign donors to third parties; and both require the identity of third party donors to be made public. That is how modern democracies conduct themselves.

But, in New Zealand, it is still acceptable (at least to the National Party) for those with the most money to have the most say."

Protests

On 17 November2007 a protest in Auckland against the Act, organised by John Boscawen, drew over 2,000 protestors. A second Auckland protest, on 1 December 2007, drew a crowd of around 5,000 protestors. Smaller protests were also held in Wellington and Christchurch.

Parliamentary process

Introduction

The Electoral Finance Bill was introduced on 23 July2007 by Minister of JusticeMark Burton, who said at the introduction of the Bill "The package of reforms introduced to Parliament will help promote participation in parliamentary democracy, and aims to clean up New Zealand's electoral system and protect it from abuse."

Bill of Rights

Under section 7 of the New Zealand Bill of Rights Act 1990, the Attorney-General must advise Parliament at the introduction of a bill if that bill is inconsistent with the New Zealand Bill of Rights Act. The Crown Law Office, which undertook the review, concluded that the Bill was consistent with the Bill of Rights. The National Business Review described Crown Law's opinion as "...one of the worst, most politically expedient calls on New Zealand human rights legislation in memory."

Select Committee

Public submissions on the Bill closed on 7 September2007. Radio New Zealand reported on 31 August that the Government has now indicated it may write to the Committee indicating it intends to make unspecified changes to the parts of the legislation dealing with third parties. This would prevent the Committee from hearing criticism of the existing provisions and allow the Government to introduce changes during the Committee of the Whole House without the public being able to make submissions on the new provisions. Prime MinisterHelen Clark has, however, denied this.

Annette King, who became Minister of Justice following a Cabinet reshuffle on 31 October 2007, announced a number of changes to the Bill.

These changes included:

Increasing the cap on total third party spending from $60,000 to $120,000;

Increasing the cap on election advertising before they have to register under the new law from $5,000 to $12,000;

Changing the definition of election advertising;

Increasing the corruption penalties to $100,000 fine.

Second Reading

The Bill was put to a second reading vote on 22 November 2007. The Bill passed 65 votes to 54, with Labour, New Zealand First, the Greens, United Future, and the Progressive Party supporting the Bill. National, ACT, the Māori Party, and independents Gordon Copeland and Taito Phillip Field voted against it, the Māori party pledging only two votes out of the four seats it holds.

Committee of the whole House

The Committee of the whole House stage began on 3 December 2007.

Third reading

The Bill passed its third reading on 18 December 2007. The Bill passed 63 for and 57 against, with the National Party, the Maori Party, ACT, United Future and independent MP Taito Phillip Field voting against and Labour, the Greens, New Zealand First and Progressive voting for. Independent MP Gordon Copeland did not vote.